THE aggressive bids which poured in for government residential land in the last few months show just how much the property market has improved.
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But is the recovery real, and how much more can prices rise? The large divergence in bid values shows that even developers themselves may be unsure about what the future holds.
In August, a site at Chestnut Avenue drew 13 bids, and the highest of $280 per square foot (psf) of gross floor area (GFA) was some 87 per cent more than the lowest of $150 psf of GFA.
The spread between bids grew in the next two tender exercises last month. Another plot at Dakota Crescent pulled in 13 bids ranging from $247 to $508 psf of GFA – 106 per cent apart.
The third site at the corner of Yio Chu Kang Road and Seletar Road – with a commercial component – saw a top bid of $376 psf of GFA, which was 144 per cent more than the lowest bid of $154 psf of GFA.
To put these numbers into context, the spread between top and bottom bids for government residential land in 2007 and 2008 hardly exceeded 60 per cent.
Only two of 14 tender exercises recorded on the Urban Redevelopment Authority’s website in those years showed spreads above that level. So it is unusual that just between August and September, bid values in three consecutive tenders have diverged so widely. Continue reading
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